Afghanistan’s future is dependent not only on its own transformation, but also on reforms in its neighbouring countries, unlocking the region’s economic potential
The East West Institute (EWI) US, which was founded in 1980with Ross Perot Jr as chairman,is an international, non-partisan organisation with offices in New York, Brussels, Moscow and Washington. Itstrack record hasmadethe EWI a global go-to place to build trust, influence policies and deliver solutions. This prestigous think tank seeks to make the world a safer place by addressing seemingly intractable problems thatthreaten regionaland global stability.
A composite delegation of business leadersis meeting in Islamabad today, with the Pathfinder Groupassisting the EWI infacilitating discussions with members of the private sector, parliamentarians from the region and relevant governmental institutions in Pakistanabout the EWI’s Afghanistan Reconnected Process (ARP).This was previouslycalled the Abu Dhabi Process because it was,at one time,being funded solely by Abu Dhabi. Now, it has theadditionalsupport of the German government to address opportunities and challenges for economic growth in Afghanistan and the rest of theregion, comprisingIndia, Pakistan, Iran, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistanand China.The UAE,US, Europeand various regional and international organisations are supporting the process. According to Ambassador Martin Fleischer, the vice president and director of the EWI’s Regional Security Initiative, ARPis based on the conviction that security and economic development are interdependent. Afghanistan’s future is dependent not only on its own transformation but also on reforms in its neighbouring countries, unlocking the region’s economic potential. The EWI’sadvocacy and outreach missions are aimed atfosteringa demand driven reform process, from which Afghanistan and its neighbouring countries, particularly Pakistan, could greatly benefit.
The EWI’s present advocacy and outreach mission to Pakistan is a follow-up to the high-level consultations held from 2013 to 2014, addressing the region’s need for reforms and crossborder cooperation in the fields of energy, trade and infrastructure.The mission focuses on regional infrastructure and connectivity, such as developing afunctioning regional network of roads, air and railway transportation as a prerequisite for further developments in trade, energy and mining. The first consultation, ‘Afghanistan reconnected: Afghanistan’s potential to act as an economic land bridge in Asia’ was held in Istanbul from April 9 to April 11, 2013.The second, ‘Afghanistan reconnected: linking energy suppliers to consumers in Asia’, was held in Islamabad from September 2 to September 4, 2013, to address the possibilities forregional energy trade between suppliers and the energy markets, especially in South Asia, focusing on Afghanistan’s potentialnot only as a transit country but as a future producer of energy.Held in New Delhi on November 19 and 20, 2013, the third consultation emphasised the need to invest in Afghanistan’s potential and facilitate the transition from an aid-based economy to a sustainable market economy.
The fourth consultation, ‘Afghanistan reconnected: creating momentum for regional economic security’was held in Berlin from April 8 to April 10, 2014. The consultation reviewed progress on regional economic cooperation to develop an agenda of targeted activities to be implemented in 2014 and 2015.Based on the Istanbul recommendations (in the fifth consultation, held on November 26-27, 2014), the private sector was recruited to advocate the implementation of the priority reform measures identified.The EWI has engaged with prominent business leaders, parliamentarians and senior government officials from the region to develop a sustainable partnership for efficient trade expansion.The Istanbul conference identified bottlenecks in regional trade and developed practical recommendations to unlock trade potential. The recommendations included adopting long-term multi-entry visa regimesto facilitate themovement of entrepreneurs in the region, establishing cross-border free trade zones,reducing smuggling and informal trade, and adopting single window customs clearance systems to streamline customs’ procedures.
The EWI’s advocacy paper has a three-pronged purpose: to lay out macro issues affecting regional cooperation and development in Afghanistan and its neighbours. To analyse in greater detail select areas of regional economic security, with good prospects for progress in the short term andhelpgenerate momentum and facilitate breakthroughs in dealing with more difficult issues.To make a case for the private sector’s proposal on regional trade and transit policy reforms.Opportunities for regional cooperation exist in various sectors including, border management, security, narcotics and trade and transit facilitation,transport infrastructure and trade facilitation,narcotics production and trafficking,electricity trade, hydropower generation and energy issues. Given the political obstacles to such progress,there is a need for political initiatives aimed at building mutual confidence, easing political concerns, attaining donor support and helping increase benefits from regional cooperation.
Obstacles to tradeinclude infrastructure costs arising from the lack of proper legal and regulatory systems, restrictive trade policies, poor border management and the absence of effective transport facilitation. They also include inadequately harmonised trade and customs procedures, lack of transparency, high levels of corruption, illegal trade, a weak private sector and the absence of vital services such as trade, finance and telecommunication facilities. While the second tier of obstacles can be resolved relatively quickly, effective cooperation is necessaryamongst regional players and within each country to overcome these issues. Once addressed, these systems can pave the way to resolving the more daunting obstacles holding back growth and stability.
Increased regional transit trade will boost private investment and growth in the short term, helping realise the long term vision for Afghanistan as a trade and transit hub. Sustained peace in Afghanistan, open trade and private sector growth, facilitated by supportive public policies, institutions and social and infrastructure investments, will help secure higher growth and reduce the risk of future economic insecurity.In order to promote long distance and continental trade with landlocked Central Asia, the development of ports serving the Indian Ocean is critical. Afghanistan’s trade is now mostly via Pakistan, through Karachi and Port Qasim. Together these two ports have a total of 40 berths that are largely underutilised. With the new Gwadar deep water port becomingincreasingly functional, the China Pakistan Economic Corridor (CPEC) can become a major force to facilitate as much as 50 percent of the total transit from Central Asia. CPEC is a game changer for the region; with increases in efficiency and trade facilitation, the capacity of all these ports could be enhanced. The prerequisite to peace and prosperity in the region is understandingand cooperation between landlocked Afghanistan and Pakistan because Pakistan provides the gateway to the Indian Ocean and the world.Ashraf Ghani’s election as Afghanistan’s Presidenthad an extraordinary effect in bettering the relations between the two countries. In thewords of this visionary, “we cannot let the past bury the future”.